STRYKER CORP SYK

Removed from 2025

• Please read this section in conjunction with the detailed tables and narrative descriptions of our NEO compensation under "Executive Compensation" beginning on page 43.
• BoehnleinVice President, Chief Financial Officer(1)J.
• StilesGroup President, OrthopaedicsViju S.
• (1)Mr. Boehnlein has elected to retire from his role as Vice President, Chief Financial Officer effective April 1, 2025 and will continue to be employed (in a non-executive officer capacity) as Advisor to the Chief Executive Officer from April 1, 2025 through March 31, 2026.
• During the advisory period, Mr. Boehnlein will continue to receive base salary at the annual rate of $800,000, remain eligible for an incentive bonus opportunity for 2025 based on a target bonus opportunity of $800,000 and be entitled to receive an advisory period incentive bonus in the amount of $215,000 provided he remains employed in the advisory capacity through March 31, 2026 and continues to support the transition of his roles and responsibilities.
• Mr. Boehnlein will also receive a transition services benefit from the Company with a value equal to approximately $50,000.
• Mr. Boehnlein did not receive an annual grant of stock awards in February 2025 and is not eligible to receive grants of stock awards during the advisory period.
• •In 2024, the value of the variable, performance and stock-based compensation elements for the NEOs averaged approximately 89% of the total value of the primary compensation elements (salary, actual bonus and stock awards).
• The bonus payout for each NEO for 2024 was 135% of target and approximated the average bonus payout for other bonus eligible employees in the Company.
• Payouts for the NEOs were above target as a result of performance that was above the target goals for all of the core bonus plan measures and above the threshold goals for all of the overachievement bonus plan measures.
• See "Annual Bonus" beginning on page 33 and "2024 Bonus Plans" beginning on page 34 for additional details;
• The payout related to the 2022 grant of performance stock units, which is discussed under "2022 Performance Stock Units: Results for the 2022-2024 Performance Period" beginning on page 38, was approximately 174% of target as a result of performance that reached the maximum goal for average reported net sales growth relative to a comparison group of companies and was between the target and maximum goals for average adjusted net earnings per diluted share growth;
• •We monitor a comparison group of medical technology and related companies to ensure that our compensation programs are within observed competitive practices, review trends and practices with assistance from the Compensation and Human Capital Committee's independent compensation consultant and make adjustments as deemed appropriate by the Compensation and Human Capital Committee; and
• •We evaluate key risk issues related to compensation and, in this regard, engaged a third-party independent consultant to conduct a risk assessment of executive compensation programs in 2022 as discussed under "Compensation Risks" on page 28 and believe that our executive compensation practices do not create risks that are reasonably likely to have a material adverse effect on Stryker.
• The Compensation and Human Capital Committee considered the results of the advisory shareholder vote on executive compensation at our 2024 annual meeting of shareholders at which the executive compensation program for our NEOs as disclosed in the proxy
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• statement for that meeting was approved by approximately 91% of the votes cast.
• The Compensation and Human Capital Committee continues to believe that our executive compensation policies, practices and programs are appropriate and, in light of the results of the advisory vote, believes our shareholders feel the same.
• Compensation Objectives
• We believe that our executive compensation program, which is a key component of our ability to attract, motivate and retain talented, qualified executives, should be designed to provide a meaningful level of total compensation that is aligned with organizational and individual performance and with the interests of our shareholders.
• The Compensation and Human Capital Committee believes that, consistent with the emphasis on rewarding executives for enhancing the Company's growth and profitability (as described more fully in "Why We Chose Particular Performance Metrics and Goals" on page 34), the Company's bonus plans should generally focus executives on financially-oriented goals that reinforce a balance in achieving short-term and long-term goals and are aligned with shareholder returns over time.
• The Company's long-term equity incentive compensation program likewise is intended to provide executives with a personal financial interest in the Company's long-term success (as described more fully in "Long-Term Incentive Compensation" beginning on page 37).
• The Compensation and Human Capital Committee believes that the Company's incentive programs balance risk and the potential reward to executives in a manner that is appropriate to the circumstances and in the best interests of the Company's shareholders over the long term.
• The principal objectives of our executive compensation policies and practices are to:
• •Attract, motivate and retain talented executives who drive the Company's success;
• •Structure compensation packages with a significant percentage of compensation earned as variable pay based on performance, which balances risk with the potential reward;
• •Align incentives with measurable corporate and business area performance;
• •Provide flexibility to adapt to changing business needs;
• •Align total compensation with shareholder value creation; and
• •Establish compensation program costs that are reasonable, affordable and appropriate.
• Executive Compensation Philosophy
• In setting compensation levels for members of our executive leadership team, the Compensation and Human Capital Committee considers information from our comparison companies and broader compensation surveys.
• We position total pay opportunities for our senior executive roles with the intent they be competitive relative to comparable roles in the market, taking into account a range of factors, including: (i) the Company’s or business unit’s general performance relative to competitors; (ii) the scope of the executive’s role relative to the normal scope of this role at comparable companies; and (iii) the executive’s tenure, experience, level of individual performance, and potential to contribute to our future growth.
• Although we review and consider the compensation provided by our comparison companies, broader compensation surveys and the results of the benchmarking studies described below under "The Role of Benchmarking in Our Executive Compensation Decisions," we do not benchmark our NEOs' compensation to a specific percentile of the market or of our comparison companies.
• Rather, we consider such data in addition to the factors described in (i) through (iii) above.
• Individual compensation elements, along with an explanation of how we make decisions about each element, are described in detail under "2024 Compensation Elements" beginning on page 33.
• Underlying our executive compensation philosophy is the desire to facilitate and encourage long-term ownership of our Common Stock.
• Our stock ownership guidelines reinforce this element of our philosophy by requiring senior management to accumulate and retain significant stock ownership positions over time.
• For more information, see "Executive and Non-Employee Director Stock Ownership Guidelines" beginning on page 41.
• The Role of Benchmarking in Our Executive Compensation Decisions
• We regularly review our compensation policies, practices and programs to determine if they are both appropriate and responsive to our business needs.
• Factors that were considered in determining the NEO compensation levels for 2024 included the results of the Company as a whole and, where applicable, the specific business areas of the Company for which each NEO was responsible, the individual's performance, changes in compensation levels over recent years, performance against bonus plan goals, comparisons among roles internally, cost to the Company and market comparison data.
• Although we monitor the competitive landscape closely and our current practice is to conduct an external market benchmarking of our NEO compensation levels and practices annually, we have not focused solely on market comparison data when establishing compensation levels.
• The Compensation and Human Capital Committee applies judgment and discretion when evaluating the appropriateness of using market comparison data as it does when determining any compensation amount or outcome.
• In mid-2023, Semler Brossy conducted a market benchmarking study in connection with establishing NEO compensation and the results were among the factors considered when 2024 compensation decisions were made, which are discussed in detail under "2024 Compensation Decisions" beginning on page 32.
• The data provided to the Compensation and Human Capital Committee by Semler Brossy showed compensation levels consisting of the primary elements of total compensation: salary, bonus and long-term incentive awards.
• The study concluded that, for the NEOs who were serving in an NEO position at the time of the study and for which a sufficient number of comparable benchmark positions at comparison companies could be identified, target cash compensation levels and the grant value of long-term incentive awards were, on average, generally consistent with our executive compensation philosophy.
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• The comparison group companies used in the 2023 benchmarking study were:
• Abbott LaboratoriesBoston Scientific CorporationMedtronic plcAgilent Technologies, Inc.Danaher CorporationQuest Diagnostics IncorporatedAmgen Inc.Eli Lilly and CompanyRegeneron Pharmaceuticals, Inc.Baxter International Inc.Gilead Sciences, Inc.Thermo Fisher Scientific Inc.Becton, Dickinson and CompanyLaboratory Corporation of America HoldingsViatris Inc.Biogen Inc.Zimmer Biomet Holdings, Inc.
• The comparison group was developed by Semler Brossy and members of our Human Resources department and approved by the Compensation and Human Capital Committee.
• Similar to prior years, the comparison companies used in the 2023 study were selected based on comparability to Stryker in terms of business focus and company size.
• The 2023 comparison group, overall, encompassed the following:
• •Product competitors or companies in the medical technology industry, as well as within adjacent industries, with which we compete for executive talent;
• •Companies with significant global operations; and
• •Companies with revenues and market capitalizations of similar scale to Stryker.
• Semler Brossy conducted an additional benchmarking study in mid-2024.
• The comparison group that was used in the 2024 study included the same companies that were used in the 2023 study except that Agilent Technologies, Inc. was removed from the group due to size considerations and GE HealthCare Technologies Inc. was added to the group as a result of it becoming a public company in the medical technology industry.
• The results of the 2024 study indicated that for the NEOs who were serving in an NEO position at the time of the study and for which a sufficient number of comparable benchmark positions at comparison companies could be identified, target cash compensation levels and the grant value of long-term incentive awards were, on average, generally consistent with our executive compensation philosophy.
• The results of the 2024 benchmarking study were one of the factors considered when the 2025 compensation decisions for the NEOs were made in February 2025.
• Those decisions are summarized under "2025 Compensation Decisions" on page 42 and will be discussed in further detail in the proxy statement for our 2026 meeting.
• Management's Role in Determining Executive Compensation
• The Compensation and Human Capital Committee makes all final decisions regarding NEO compensation, except that the compensation of the Chief Executive Officer is subject to final approval by the independent members of the Board.
• The Chief Executive Officer's role in determining executive compensation includes making recommendations on compensation decisions for members of our executive leadership team other than himself after reviewing information provided by our Vice President, Chief Human Resources Officer and other members of the Human Resources department.
• Management's role in determining executive compensation includes:
• •Developing, summarizing and presenting information and analyses to enable the Compensation and Human Capital Committee to execute its responsibilities, as well as addressing specific requests for information from the Compensation and Human Capital Committee;
• •Attending Compensation and Human Capital Committee meetings as requested to provide information, respond to questions and otherwise assist the Compensation and Human Capital Committee;
• •Developing individual NEO bonus plans for consideration by the Compensation and Human Capital Committee, reporting to the Compensation and Human Capital Committee regarding achievement against the bonus plans and providing recommendations related to the final bonus payout values; and
• •Preparing stock-based award recommendations for the Compensation and Human Capital Committee's approval, which includes providing the Compensation and Human Capital Committee with regular updates on run rate (the rate at which stock awards are being awarded under our equity plans) and overhang (a measure of potential earnings dilution from stock awards) levels, and reporting to the Compensation and Human Capital Committee at the end of the performance period regarding the number of performance stock units earned based on achievement of the pre-established goals.
• Semler Brossy performs a similar role for the Compensation and Human Capital Committee with respect to compensation recommendations for the Chief Executive Officer and the non-employee directors.
• 2024 Compensation Decisions
• In February 2024, the Compensation and Human Capital Committee reviewed and approved the 2024 cash compensation levels for our NEOs other than Mr. Lobo after receiving recommendations from Mr. Lobo and our Vice President, Chief Human Resources Officer.
• The 2024 cash compensation levels for Mr. Lobo were reviewed and approved by the Compensation and Human Capital Committee and independent directors of the Board after they received recommendations from Semler Brossy.
• The recommendations and ultimate 2024 cash compensation levels for all of the NEOs reflected subjective evaluations and decisions based on the scope of each NEO's responsibilities in his current role, the level of performance in 2023 of the business areas for which he was responsible (if applicable), his time and proficiency in the job, comparisons of pay levels relative to similar positions within the Company (if applicable) and consideration of the other factors described under "Executive Compensation Philosophy" on page 31.
• The following table summarizes
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• the annualized 2024 base salary (effective as of March 1, 2024), the 2024 target bonus and the respective percentage increase relative to 2023 for both of those amounts for each NEO:
• Name2024 Annualized Base Salary ($)% Increase Relative to 20232024 Target Bonus ($)% Increase Relative to 2023Kevin A.
• Lobo1,450,0003.6%2,175,0003.6%Glenn S.
• Boehnlein800,0005.3%800,0005.3%J.